What Yahoo Really Wanted With the Mobile Ad Firm Flurry

With its acquisition of Flurry on Monday, Yahoo just bought a big mobile ad network, just like the ones that Twitter, Facebook and Google operate. But that doesn’t necessarily make it a big player in mobile advertising, executives in the sector say.

Flurry has only just begun making headway into selling mobile ads and has a much bigger footprint in mobile data and analytics, say observers.

Still, the benefit for Yahoo is that Flurry has huge swaths of proprietary data on how people use mobile apps that can theoretically be gleaned for ad targeting on mobile apps. Plus, Flurry’s data, which come from 170,000 developers using its analytics product, could also help Yahoo better program it’s own apps or identify mobile apps that are growing rapidly that might make prime acquisition targets.

MoPub helps apps make money by helping figure out which advertiser or ad network will pay the most in a given moment (a practice known in the industry as “real time bidding.”) Flurry launched a similar product a little more than a year ago, but mobile ad experts say it doesn’t nearly have the traction or technical sophistication that MoPub does.

Meanwhile, Facebook’s new mobile ad network is designed to deliver better targeted mobile ads on sites across the Web using Facebook’s rich trove of Web user data. That approach might be closer in nature to what Yahoo might do with Flurry.

Theoretically, said mobile insiders, Yahoo could meld its own set of user data with Flurry’s data from the mobile apps it tracks (in its Tumblr post about the acquisition Yahoo says it sees data from 1.4 billion devices a month) to create a super-robust mobile ad targeting offering. It could use that data combo to deliver mobile ads on its own apps, Flurry’s existing app clients, and a slew of other apps.

“You could take the this trove of data, turn it into intelligence and make it valuable,” said Eric Bader, CMO of the advertising technology firm RadiumOne.

Makes sense. But given how much CEO Marissa Mayer has spoken about the importance of mobile to Yahoo, including the off stated goal of become a “daily habit” for mobile users and the of- quoted statistic that Yahoo currently reaches 450 million mobile users,” isn’t it fair to ask–why does Yahoo need any help with mobile?

“If you look at what’s really happened with mobile, the mobile Internet is the Internet of apps,” said Chia Chen, the Mobile Practice Lead at Digitas. That’s not particularly Yahoo’s strength, said Mr. Chen.

It’s worth noting that while Facebook and Google have quickly amassed large mobile revenue streams over the past few years, Yahoo did not call out mobile ad revenue during its earnings call last week.

Meanwhile, mobile apps, particularly games, are selling lots of ads these days–often for other mobile games. The so-called “app install” market has taken off for Facebook, and recently both Twitter and Yahoo have made a push for this market.

So why wouldn’t Yahoo just build out its own mobile app network? Well, it’s tough to do, say experts. Unlike in the desktop world, where ad networks are abundant and fairly simple to start, mobile apps require a more complicated software integration to connect advertisers. With its analtyics business Flurry has spent close to a decade integrating with over 500,000 mobile apps, giving the company a unique purview.

“Apps are a very difficult audience to aggregate. A mobile ad network is just hard to build. ” said Mitchell Reichgut, Chief Executive Officer at the social advertising firm Jun Group. “Right now, practically everybody in gaming is using Flurry. People probably have two to three apps on their phones right now with Flurry software. This gives Yahoo a broad footprint.”

Comments (2 of 2)

Yahoo's next acquisition should be Millennial Media. Utilizing the data from own apps, Flurry’s existing app clients, and Millennial Media's unique mobile data mining tools would make Yahoo a significant player in mobile arena.

6:48 pm July 22, 2014

Zane wrote:

Has to be improved targeting. Like Facebook and Airpush, Yahoo is pushing native mobile ads in a very big way. It's hard to deliver relevant and effective native ads without hard data deployed in the targeting process.

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